Credit Worthy News

As historic preservation advocates spend the week on Capitol Hill for Preservation Action's Advocacy Week, the National Park Service has released the Federal Tax Incentives for Rehabilitation Historic Buildings: Annual Report for Fiscal Year 2017.

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Among the impressive findings for 2017:

Over $5.8 billion of private investment was certified (Part 3).

Almost 107,000 jobs were created.

There was a 16 percent increase in Part 2 approvals, representing an estimated $9.07 billion in QREs.

With FY 2018 well underway, and even with the late 2017 tax law changes, we expect that these trends will continue to show the positive effects of the historic tax credit program on our nation's historic buildings.

Making headlines around the country, the big change to the federal historic tax credit has people talking and speculating. The tax credit itself was saved, which was welcomed with a collective sigh of relief from preservationists, developers, architects, and community leaders across the nation; however, the effect of one major change requiring owners to take the credit over five years instead of the first year has been the speculation of national and local news media and industry leaders over the last two months.

We don't have all the answers on what the outcome of the change will be yet, but in the February 2018 issue of the Novogradac Journal of Tax Credits, we examine how state historic tax credit programs that have equal installment strcutures have fared and what we can learn from them.

INSIDE THIS ISSUE| With new rules in place for the federal historic tax credit in the new year, we take a look at the history and future of the program. This edition of our quarterly newsletter also features historic rehabilitation projects currently underway, state HTC news, recent project honors, and exciting team news.

The tax reform conference committee issued its report late Friday afternoon and the 20% HTC taken over five years was included, a provision that was introduced in an amendment by Sen. Bill Cassidy (R-LA) which reinstated the 20% rate from 10% as contained in the original version of the Senate bill. (The 10% credit for non-historic pre-1936 buildings has been completely eliminated.) Overall, this is good news for the historic rehabilitation industry and historic communities across the country. The next step will be the reconciled version of the bill to be voted on by the House and Senate this week, with signature by the President looking likely before Christmas.

While the five year provision is not ideal, it appears the federal historic tax credit will continue to be a viable program, and hopefully there will be opportunities in the near future to improve the law. (An important note: should the bill pass as is expected, those wanting to qualify for the current federal HTC program must have the "taxpayer" claiming the credit as owner of the building by the end of 2017.)

An unexpected positive development in the conference report was the inclusion of the option for 60-month phased projects under the transition rule. This was a glaring omission from the earlier versions of the bill, which only addressed the 24-month basis test counting period and created uncertainty for current and future phased projects, and was an issue lobbied by the Historic Tax Credit Coalition (HTCC).

Many thanks are due those of you that stood with the HTCC to voice your support for the tax credit. We encourage you to reach out and thank the legislators that have been champions for the incentive in critical ways, such as Sen. Bill Cassidy (R-LA) and Sen. Tim Scott (R-SC). The need for our advocacy is far from over, but we could not have gotten to where we are now without the efforts of all involved.

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